Slip Op. 14 - 

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Timothy C. Stanceu, Judge 

Consol. Court No. 11-00022 

OPINION AND ORDER 

[Affirming in part and remanding in part a decision of the U.S. Department of Commerce in an 

action contesting the final results of an administrative review of an antidumping duty order on 

tapered roller bearings from China] 

Dated:

John M. Gurley and Diana Dimitriuc Quaia, Arent Fox LLP, of Washington, DC, for 

plaintiff and defendant-intervenor Peer Bearing Company-Changshan. 

L. Misha Preheim, Trial Attorney, and Patricia M. McCarthy, Assistant Director, 

Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, 

for defendant. With them on the brief were Stuart F. Delery, Assistant Attorney General, and 

Jeanne E. Davidson, Director. Of counsel on the brief was Joanna V. Theiss, Office of the Chief 

Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC. 

Herbert C. Shelley and Christopher G. Falcone, Steptoe & Johnson LLP, of Washington, 

DC, for defendant-intervenors Changshan Peer Bearing Company Ltd. and Peer Bearing 

Company. 

William A. Fennell, Terence P. Stewart, and Stephanie R. Manaker, Stewart and Stewart, 

of Washington, DC, for plaintiff and defendant-intervenor The Timken Company. 

PEER BEARING COMPANY-CHANGSHAN,

Plaintiff,

v.

UNITED STATES,

Defendant,

and

THE TIMKEN COMPANY,

Defendant-intervenor.

-XQH
Consol. Court No. 11-00022 Page 2

Stanceu, Judge: This consolidated case arose from challenges to the final determination 

(“Final Results”) that the International Trade Administration, U.S. Department of Commerce 

(“Commerce” or the “Department”) issued to conclude the twenty-second periodic 

administrative review of an antidumping duty order (the “Order”) on tapered roller bearings 

(“TRBs”) and parts thereof, finished and unfinished, from the People’s Republic of China 

(“China” or “PRC”). Tapered Roller Bearings & Parts Thereof, Finished & Unfinished, From 

the People’s Republic of China: Final Results of the 2008-2009 Antidumping Duty Admin. 

Review, 76 Fed. Reg. 3,086 (Jan. 19, 2011) (“Final Results”). The twenty-second administrative 

review pertained to entries of TRBs and parts thereof from China (the “subject merchandise”) 

occurring during the period of June 1, 2008 through May 31, 2009 (the “period of review” or 

“POR”). Id., 76 Fed. Reg. at 3,086. 

Before the court is the decision (“Remand Redetermination”) Commerce submitted in 

response to the court’s remand order in Peer Bearing Co.-Changshan v. United States,

36 CIT __, 884 F. Supp. 2d 1313 (2012) (“Peer Bearing-Changshan”). Final Results of 

Redetermination Pursuant to Ct. Remand (May 13, 2013), ECF No. 100 (public version), ECF 

No. 101 (confidential version) (“Remand Redetermination”).1

 For the reasons stated herein, the 

court orders a second remand on two issues in this case and affirms the Remand Redetermination 

on a third issue. 

I. BACKGROUND

Background is provided in the court’s prior opinions and is supplemented herein. Peer

Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d at 1317-18; Peer Bearing Co.-Changshan v. 

1

 Unless otherwise specified, all citations to Final Results of Redetermination Pursuant to 

Court Remand (“Remand Redetermination”) filed on May 13, 2013 are to the public version, 

ECF No. 100 (“Remand Redetermination”). 
Consol. Court No. 11-00022 Page 3

United States, 35 CIT __, __, Slip Op. 11-125, at 2 (Oct. 13, 2011) (denying a motion to dismiss 

one of the claims brought in this consolidated action). 

Plaintiffs Peer Bearing Company-Changshan (“CPZ”), a Chinese producer and exporter 

of TRBs, and its affiliated U.S. reseller, Peer Bearing Company, initiated the above-captioned 

matter to contest the Final Results. See Compl. (Feb. 2, 2011), ECF No. 6. The Timken 

Company (“Timken”), a domestic TRB producer, initiated a separate action contesting the Final 

Results and is a defendant-intervenor in this action. See Compl. (Mar. 10, 2010), ECF No. 9 

(Court No. 11-00039). The two cases have since been consolidated. See Order (June 13, 2011), 

ECF No. 27 (consolidating Timken Co. v. United States (Court No. 11-00039) into the 

above-captioned matter). The other defendant-intervenors are Changshan Peer Bearing 

Company Ltd., a new company formed after the shares of CPZ were acquired during the POR 

(on September 11, 2008) by various companies controlled by Swedish company SKF, and its 

affiliated U.S. reseller, also known as Peer Bearing Company, a new U.S. entity that was formed 

when the SKF companies acquired the former Peer Bearing Company at the same time they 

acquired CPZ. See Peer Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d at 1317. CPZ and 

the former Peer Bearing Company are no longer in existence; each transferred its responsibilities 

for participating in antidumping proceedings to a separate company, PBCD, LLC, which also 

assumed liability for paying antidumping duties. Id. Commerce determined that Changshan 

Peer Bearing Company Ltd., the new Chinese producer, and the new U.S. entity, Peer Bearing 

Company, are not successors in interest to the former entities, and as a result Peer Bearing 

Company-Changshan and Changshan Peer Bearing Company were separate respondents in the 

twenty-second review. Id.
Consol. Court No. 11-00022 Page 4

In the Final Results, Commerce assigned a weighted-average antidumping duty margin of 

38.39% to PBCD and a weighted-average antidumping duty margin of 14.13% to the new 

exporter/producer, Changshan Peer Bearing Company, to which Commerce referred as “SKF”. 

Id. at __, 884 F. Supp. 2d at 1317-18. In this Opinion and Order, the court also refers to 

Changshan Peer Bearing Company as “SKF.” The court refers to the former producer and 

respondent as “CPZ” and to the entity now litigating the claims brought by CPZ as “PBCD.” 

Pursuant to the court’s remand order, Commerce filed the Remand Redetermination on 

May 1, 2013. The various parties have filed comments on the Remand Redetermination with the 

court. PBCD raises objections to the Remand Redetermination on one issue. Pl. Peer Bearing 

Co.-Changshan’s Comments on Def.’s Final Results of Redetermination Pursuant to Ct. Remand 

(June 12, 2013), ECF No. 106 (public version) (“PBCD’s Comments”). SKF objects on two 

issues. Pls.’ Comments on Final Results of Redetermination Pursuant to Remand 

(June 12, 2013), ECF No. 103 (“SKF’s Comments”). Timken supports the Remand 

Redetermination in the entirety. Comments on Final Results of Redetermination Pursuant to Ct. 

Remand (June 12, 2013), ECF No. 105 (“Timken’s Comments”). The changes Commerce made 

in the Remand Redetermination resulted in a decrease of PBCD’s margin from 38.39% to 

22.82% and an increase in SKF’s margin from 14.13% to 22.12%. See Remand 

Redetermination 68.

II. DISCUSSION

A. Jurisdiction and Standard of Review 

The court exercises jurisdiction under section 201 of the Customs Courts Act 

of 1980, 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced under 

section 516A of the Tariff Act of 1930 (“Tariff Act”), 19 U.S.C. § 1516a, including an action 

contesting the final results of an administrative review that Commerce issues under section 751 
Consol. Court No. 11-00022 Page 5

of the Tariff Act, 19 U.S.C. § 1675(a).2

 When reviewing the final results of an administrative 

review, the court “shall hold unlawful any determination, finding, or conclusion found . . . to be 

unsupported by substantial evidence on the record, or otherwise not in accordance with law. . . .” 

19 U.S.C. § 1516a(b)(1)(B)(i). 

B. Remaining Issues 

Three issues remain in dispute in this case. In the Remand Redetermination, Commerce 

addressed each of these issues and departed from the decision in the Final Results with respect to 

two of them, as summarized below. 

The first remaining issue is PBCD’s challenge to the Department’s decision that certain 

TRBs resulting from processing and assembly operations conducted in Thailand by a CPZ 

affiliate were of Chinese origin and therefore within the scope of the Order. The court remanded 

this issue for the Department’s reconsideration, and in response, Commerce modified its 

country-of-origin analysis in minor respects but again determined that the country of origin of 

the TRBs in question was China. Remand Redetermination 9-36, 45-58. PBCD opposes the 

origin determination on various grounds. PBCD’s Comments 3-19. As discussed later in this 

Opinion and Order, the court concludes that the Department’s decision to include the TRBs 

within the Order was contrary to law. 

The second remaining issue is PBCD’s challenge to the Department’s surrogate value 

determination for bearing-quality steel bar that PBCD used in producing TRBs. In response to 

the court’s remand order in Peer Bearing-Changshan, Commerce calculated a new surrogate 

value for the bearing-quality steel bar. Remand Redetermination 36-39, 60-61, 63-67. PBCD 

2

 Unless otherwise specified, all statutory citations herein are to the 2006 edition of the 

United States Code and all citations to regulations are to the 2011 edition of the Code of Federal 

Regulations. 
Consol. Court No. 11-00022 Page 6

supports the redetermined surrogate value. PBCD’s Comments 3. SKF opposes it on the ground 

that Commerce should not have used a surrogate value but instead should have valued all steel 

bar input using data pertaining to SKF’s own market economy purchases of bearing-quality steel 

bar. SKF’s Comments 12-16. For the reasons discussed herein, the court sustains the 

redetermined surrogate value. 

The final remaining issue is Timken’s challenge to the Department’s determination of the 

factors of production (“FOPs”) used to calculate the normal value of certain TRBs that had been 

manufactured by the former producer, CPZ, but were sold from SKF’s acquired inventory by the 

newly formed Peer Bearing Company. Specifically, Timken claimed that Commerce incorrectly 

used the FOPs pertaining to SKF and instead should have used the FOPs pertaining to CPZ 

because CPZ had produced the merchandise in question. Peer Bearing-Changshan, 36 CIT 

at __, 884 F. Supp. 2d at 1338. In the Remand Redetermination, Commerce recalculated the 

normal value of the TRBs at issue using certain record FOP data pertaining to the brief period 

between the beginning of the POR and the acquisition. Remand Redetermination 39. Timken 

supports the decision Commerce made to resolve this issue. Timken’s Comments 1. SKF 

opposes it on various grounds. SKF’s Comments 3-12. As discussed later in this Opinion and 

Order, the court orders reconsideration of the decision, concluding that Commerce failed to 

address the issue of which record data pertaining to CPZ was most appropriate for use in valuing 

the factors of production. 

C. Commerce Erred in Finding that Certain TRBs Processed in Thailand Were Within the Scope 

of the Antidumping Duty Order 

In the Final Results, Commerce found that certain TRBs that had resulted from 

processing conducted in Thailand by a PBCD affiliate were products of China and therefore 

within the scope of the Order. Peer Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d. at 1319.
Consol. Court No. 11-00022 Page 7

The manufacturing operations performed in Thailand included grinding and honing of 

unfinished, Chinese-origin cups and cones and assembly operations using the finished cups and 

cones and Chinese-origin cages and rollers. Id. Commerce applied what it termed its 

“substantial transformation” test to reach a decision that it described as based upon a “totality of 

the circumstances.” Id. In explaining how it reached its conclusion, Commerce discussed six 

criteria: (1) the class or kind of merchandise within the scope of the Order; (2) the nature and 

sophistication of the upstream processing (i.e., the processing conducted in China) and the 

third-country processing (i.e., the processing conducted in Thailand); (3) the identification of the 

processing that imparts the essential physical or chemical properties of a TRB; (4) the cost of 

production and value added by the third-country processing; (5) the level of investment in the 

third country and the potential for circumvention; and (6) whether unfinished and finished 

bearings are both intended for the same ultimate end use. Id. Commerce found that the TRBs 

had not been “substantially transformed” by operations in Thailand and thus were of Chinese 

origin and within the scope of the Order. Id. at __, 884 F. Supp. 2d. at 1319-20. 

In Peer Bearing-Changshan, the court reviewed the Final Results and identified 

numerous deficiencies with the Department’s decision. Id. at __, 884 F. Supp. 2d. at 1324-25.

Among the deficiencies the court identified was the Department’s failure to provide reasoning 

why its first criterion, “class or kind of merchandise,” was relevant to the origin issue the case 

presents. Id. at __, 884 F. Supp. 2d. at 1320-23. That question is, namely, “whether the 

Chinese-origin parts, finished and unfinished, which were converted into finished TRBs by the 

processing in Thailand, were ‘substantially transformed’ by that processing.” Id. at __, 884 F. 

Supp. 2d. at 1320. The court also criticized a finding Commerce reached under its sixth, 

“ultimate use” criterion, which was that an unfinished TRB is intended for the same ultimate end 
Consol. Court No. 11-00022 Page 8

use as a finished TRB. Id. at __, 884 F. Supp. 2d at 1323-24. Observing that the substantial 

transformation issue presented by this case does not involve unfinished TRBs, the court took 

issue with this finding. Id. at __, 884 F. Supp. 2d. at 1324 (“No individual part exported from 

China to Thailand plausibly could have been found to be an unfinished bearing, and Commerce 

made no finding to that effect.”). Additionally, the court held that the record lacked substantial 

evidence to support the Department’s finding, under its fourth criterion, that no significant value 

had been added to the finished TRBs as a result of the processing conducted in Thailand. Id.

at __, 884 F. Supp. 2d. at 1322-23. The court did not sustain the Department’s country-of-origin 

finding and directed Commerce to reconsider its determination in the entirety. Id. at __, 884 F. 

Supp. 2d. at 1324-25, 1339. The court specified that “[a]ny determination Commerce reaches on 

remand must rely solely on criteria relevant to whether the parts exported to Thailand were 

substantially transformed and must be based on findings supported by substantial record 

evidence.” Id. at __, 884 F. Supp. 2d. at 1325. 

In the Remand Redetermination, Commerce again determined that the TRBs processed in 

Thailand are products of China and, therefore, within the scope of the Order. Remand

Redetermination 9-10. Although Commerce discussed the deficiencies the court identified in 

Peer Bearing-Changshan, the Remand Redetermination, despite the court’s order to rely solely 

on relevant criteria, made no essential changes to the criteria Commerce applied previously. 

On remand, Commerce again concluded that its first criterion, “class or kind/scope,” was 

relevant to its origin determination and “weighs against a finding of substantial transformation 

where the upstream and downstream products are within the same class or kind/scope.” Remand

Redetermination 11. In response to the court’s order, Commerce gave reasoning for its 

conclusion, stating that “the class or kind/scope criterion is relevant to a country-of-origin 
Consol. Court No. 11-00022 Page 9

analysis because if the downstream product becomes a different class or kind of product, or falls 

outside the scope of the order, this weighs in favor of a finding that the product is a new and 

different article of commerce (i.e., substantially transformed) in the third country.” Id. at 10 

(footnote omitted). Commerce also stated that its conclusion under its first criterion “is not 

definitive of the ultimate question,” reasoning that “[t]he Court is correct to note that, as the 

Department itself noted in the prior review, the central issue is whether the unfinished 

components shipped by PBCD to Thailand for further processing and assembly are substantially 

transformed, not whether the inputs and outputs of Thai processing are both products included in 

the scope of the TRBs Order.” Id. at 11. 

Commerce proceeded to find that the remaining five criteria (“nature/sophistication of 

processing,” “physical/chemical properties and essential component,” “cost of production/value 

added,” “level of investment,” and “ultimate use”) also “suggested against a finding that the Thai 

processing constitutes substantial transformation.” Id. at 45. 

Commerce made new findings to respond to the court’s ruling that record evidence did 

not support the Department’s earlier finding, made under the fourth, “cost of production/value 

added” criterion, that no significant value had been added to the finished TRBs as a result of the 

processing conducted in Thailand. Commerce reported in the Remand Redetermination that it 

calculated three weighted-average per-unit cost of production (“COP”) ratios to determine the 

value added in Thailand, each of which it derived by dividing the sum of the reported 

manufacturing labor and overhead costs incurred in Thailand by the sum of those costs and the 

COP incurred in China, which included materials costs as well as manufacturing labor and 

overhead. Id. at 21-22. Commerce calculated three separate ratios because it performed the 

calculations using COP-related data (which were on the record but not used for this purpose in 
Consol. Court No. 11-00022 Page 10

the Final Results) for (1) CPZ-produced TRBs sold by the CPZ-affiliated Peer Bearing Company 

prior to the acquisition, (2) CPZ-produced TRBs imported prior to the acquisition and sold, 

post-acquisition, by the SKF-affiliated Peer Bearing Company, and (3) TRBs that SKF produced 

post-acquisition that were then sold by the SKF-affiliated Peer Bearing Company. Remand

Redetermination 22.

It appears from the Remand Redetermination that Commerce used actual COP data for 

the Thai operations but, contrastingly, used surrogate values to value the factors of production 

for operations that occurred in China, modified according to the changes it made on remand to 

the bearing-quality steel surrogate value and to the factors of production for CPZ-produced 

TRBs that were sold post-acquisition. Id. at 22-23. With respect to the ratios, Commerce stated 

that it did not find that the percentages it calculated were “representative of a significant value 

added by the Thai further processing.”3 Id. at 23. With respect to “qualitative” (as opposed to 

quantitative) value-added information, Commerce found that “the grinding and assembly 

processes (whether they take place in the PRC or Thailand) are relatively minor compared with 

the totality of the upstream processes.” Id. at 25. Commerce further found that “the value of 

energy and labor consumed by the Thai processor in the grinding and assembly of TRB 

components is insignificant when compared to the total value of the finished merchandise.” Id.

at 26. 

Pursuant to its fifth criterion, “level of investment in the third country and the potential 

for circumvention,” the Remand Redetermination “considered the production equipment used in 

each stage of production in the PRC and in Thailand in order to make a finding concerning the 

3

 The actual ratios appear in the confidential version of the Remand Redetermination but 

are not presented in this Opinion and Order due to a claim for proprietary treatment. 
Consol. Court No. 11-00022 Page 11

level of investment.” Remand Redetermination 30. Commerce “determined that the 

equipment/production line requirements for the processes performed in Thailand are not 

significant in comparison to those required for the production stages completed in the PRC.” Id.

Under its sixth criterion, which pertained to “ultimate end use,” the Remand 

Redetermination altered the analysis presented in the Final Results to change the focus from 

“unfinished” TRBs to the unfinished and finished parts. As Commerce stated in the Remand 

Redetermination, “once the issue is reframed to focus on the parts (rather than the ‘unfinished 

TRB’), the criterion becomes relevant to the analysis because the ground and un-ground (but 

unassembled) component TRB parts are intended for the same ultimate end use as the finished 

and assembled TRB: as a finished TRB that can be used in a downstream product.” Id. at 35.

PBCD continues to oppose the Department’s country-of-origin determination. PBCD’s 

Comments 3-19. PBCD argues, inter alia, that the Department’s “substantial transformation” 

analysis on remand “raises many of the same concerns in the Court’s Remand Order,” id. at 4, 

and that the Department’s conclusions therein “remain unsupported by a persuasive rationale,” 

id. at 7. PBCD further contends that the Department’s analysis on the country-of-origin question 

should have reflected “industry practice and the twenty years of country of origin practice by 

U.S. Customs and Border Protection.” PBCD’s Comments 7. Timken supports the 

Department’s determination but offers no specific comments on the issue. See Timken’s 

Comments. 

1. Commerce is Authorized to Interpret, But Not Enlarge, the Scope of an Antidumping Duty

Order, Unless it Invokes its Anticircumvention Authority 

The general rule is that Commerce, when determining whether merchandise falls within 

the scope of an existing antidumping duty order, may interpret the scope language of the order 

but may not modify it. Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1097 (Fed. 
Consol. Court No. 11-00022 Page 12

Cir. 2002) (“Duferco”). Under this general rule, Commerce may not place merchandise within 

the scope of an order if the scope language may not reasonably be interpreted to include that 

merchandise. Id., 296 F.3d at 1089 (“Scope orders may be interpreted as including subject 

merchandise only if they contain language that specifically includes the subject merchandise or 

may be reasonably interpreted to include it.”). The question posed by this case is whether the 

term from the scope language, “imports of tapered roller bearings from the PRC,” reasonably can 

be interpreted to include the TRBs in question.4 Notice of Antidumping Duty Order; Tapered 

Roller Bearings & Parts Thereof, Finished or Unfinished, From the People’s Republic of China,

52 Fed. Reg. 22,667 (June 15, 1987) (emphasis added) (“Antidumping Duty Order”).

The general rule that Commerce may construe but not modify the scope of an existing 

order is subject to a statutory exception, for in certain specified situations, Commerce may 

4

 In the Final Results, the International Trade Administration, U.S. Department of 

Commerce (“Commerce” or the “Department”) stated that the relevant antidumping duty order 

applies to “shipments of tapered roller bearings and parts thereof, finished and unfinished, from 

the [People’s Republic of China (“PRC”)]; flange, take up cartridge, and hanger units 

incorporating tapered roller bearings; and tapered roller housings (except pillow blocks) 

incorporating tapered rollers, with or without spindles, whether or not for automotive use.” 

Tapered Roller Bearings & Parts Thereof, Finished & Unfinished, From the People’s Republic 

of China: Final Results of the 2008-2009 Antidumping Duty Admin. Review, 76 Fed. Reg. 3,086, 

3,087 (Jan. 19, 2011) (“Final Results”). The actual text of the original order varies slightly from 

the Department’s characterization in the Final Results. Referring to “imports of tapered roller 

bearings from the PRC,” the order in its original form contains the following scope language: 

The products covered by this investigation are tapered roller bearings and 

parts thereof, currently classified in Tariff Schedules of the United States (TSUS) 

item numbers 680.30 and 680.39; flange, take up cartridge, and hanger units 

incorporating tapered roller bearings, currently classified in TSUS item 681.10; 

and tapered roller housings (except pillow blocks) incorporating tapered rollers, 

with or without spindles, whether or not automotive use, currently classified in 

TSUS item number 692.32 or elsewhere in the TSUS. 

Notice of Antidumping Duty Order; Tapered Roller Bearings & Parts Thereof, Finished or 

Unfinished, From the People’s Republic of China, 52 Fed. Reg. 22,667 (June 15, 1987). The 

text of the original order mentions “unfinished” tapered roller bearings and parts only in the 

title. Id. 
Consol. Court No. 11-00022 Page 13

enlarge the scope of an order by invoking the “prevention of circumvention” provisions 

contained in section 781 of the Tariff Act, 19 U.S.C. § 1677j. See AMS Assoc. v. United States,

737 F.3d 1338, 1343 (Fed. Cir. 2013) (“In order to prevent circumvention, 19 U.S.C. 

§§ 1677j(a)-(d) authorize Commerce to expand the scope of existing antidumping and 

countervailing duty orders to reach products that are not covered by the existing scope . . .”); 

Duferco, 296 F.3d at 1098 (“So too the very existence of section 1677j of Title 19 emphasizes 

the general requirement of defining the scope of antidumping and countervailing duty orders by 

the actual language of the orders.”). 

The antidumping duty statute does not speak generally to the question of how Commerce 

is to interpret the scope language of an order when the question is whether a good should be 

considered to be a good or “from” the country named in that order. But in paragraphs (A) and 

(B) of § 1677j(b)(1), the statute specifically addresses the situation in which a good imported 

into the United States is completed or assembled in a “third country,” i.e., a country other than 

the country named in the order. These provisions describe merchandise “imported into the 

United States” that “is of the same class or kind” as merchandise named in an antidumping duty 

order and is, before such importation, “completed or assembled” in a third country from 

merchandise that is “subject to such order” or “produced in the foreign country with respect to 

which such order . . . applies.”5

 19 U.S.C. § 1677j(b)(1)(A), (B). 

5

 19 U.S.C. § 1677j(b)(1) provides, in pertinent part, as follows: 

(b) Merchandise completed or assembled in other foreign countries 

(1) In general 

 If—

(A) merchandise imported into the United States is of the same class or kind as any 

merchandise produced in a foreign country that is the subject of— 

(i) an antidumping duty order issued under section 1673e of this title, . . . 

(B) before importation into the United States, such imported merchandise is completed or 

(continued...)
Consol. Court No. 11-00022 Page 14

In the situation described by paragraphs (A) and (B) of § 1677j(b)(1), Commerce is 

empowered to “include such imported merchandise within the scope of such order . . . at any 

time such order . . . is in effect,” id. § 1677j(b)(1), provided three conditions are met. 6 Those 

conditions, set forth in paragraphs (C)-(E), are that “the process of assembly or completion in the 

foreign country . . . is minor or insignificant,” id. § 1677j(b)(1)(C), “the value of the merchandise 

produced in the foreign country to which the antidumping duty order applies is a significant 

portion of the total value of the merchandise exported to the United States,” id. § 1677j(b)(1)(D), 

and Commerce “determines that action is appropriate under this paragraph to prevent evasion of 

such order . . . ,” id. § 1677j(b)(1)(E). 

(continued...)

assembled in another foreign country from merchandise which— 

(i) is subject to such order . . . , or 

(ii) is produced in the foreign country with respect to which such order . . . applies, 

(C) the process of assembly or completion in the foreign country . . . is minor or 

insignificant,

(D) the value of the merchandise produced in the foreign country to which the 

antidumping duty order applies is a significant portion of the total value of the 

merchandise exported to the United States, and 

(E) the administering authority determines that action is appropriate under this paragraph 

to prevent evasion of such order . . . , 

the administering authority, after taking into account any advice provided by the 

[International Trade] Commission under subsection (e) of this section, may include such 

imported merchandise within the scope of such order . . . at any time such order . . . is 

in effect. 

19 U.S.C. § 1677j(b)(1) (emphasis in original). 

6

 The statute imposes as a fourth condition that Commerce, before including the 

merchandise within the scope of the antidumping duty order, “take into account” any advice the 

International Trade Commission provides after Commerce provides the Commission with notice 

of the intended action. 19 U.S.C. § 1677j(b)(1). Nonetheless, the Department’s decision on 

whether the merchandise is within a category for which notice is required is not subject to 

judicial review. Id. § 1677j(e)(1). Additionally, in deciding whether to expand an order to 

include the merchandise in question, Commerce is to “take into account such factors as—the 

pattern of trade, including sourcing patterns,” whether the two producers are affiliated, and 

whether imports of the merchandise increased after the investigation resulting in the order. Id.

§ 1677j(b)(3).
Consol. Court No. 11-00022 Page 15

Paragraphs (A) and (B) of 19 U.S.C. § 1677j(b)(1) describe precisely the factual situation 

presented by this case. The TRBs at issue were assembled in the third country (here, Thailand), 

if not also “completed” there.7 Id. § 1677j(b)(1)(B). The unfinished cups and cones and the 

finished cages and rollers were, in the words of § 1677j(b)(1)(B), “merchandise which . . . is 

subject to such order” as well as merchandise “produced in the foreign country with respect to 

which such order . . . applies.” Id.

In the Final Results, Commerce “found no potential for evasion” of the Order and 

“avoided any reliance on its anticircumvention authority . . . .” Peer Bearing-Changshan,

36 CIT at __, 884 F. Supp. 2d. at 1321. In the Remand Redetermination, Commerce again 

indicated that it was not performing an anticircumvention analysis under 19 U.S.C. § 1677j(b).

Remand Redetermination 34 (“we clarify that we do not reach a determination as to whether 

circumvention had occurred or may occur . . . .”).8

 Accordingly, Commerce lacked authority to 

expand the scope of the Order in deciding the question of whether the TRBs assembled and 

completed in Thailand were within that scope. Any “substantial transformation criteria” or 

“totality of the circumstances test” Commerce used to decide that question was required to be 

consistent with the limitations on the Department’s authority. To summarize, those limitations 

stem from two sources: the scope language of the Order itself (“imports of tapered roller 

7

 The TRBs were “completed” in Thailand only in the sense that they required no further 

processing before exportation to the United States. Describing them as “completed” in Thailand 

implies that the operations in Thailand were performed on incomplete bearings from another 

country (here, China), which was not the case. 

8

 In response to an inquiry by defendant, the court clarified that Peer Bearing 

Co.-Changshan v. United States, 36 CIT __, 884 F. Supp. 2d 1313 (2012) (“Peer BearingChangshan”) was not intended to, and does not, order Commerce to conduct an analysis under 

19 U.S.C. § 1677j(b). Order Granting Extension of Time for Filing of Remand Results and 

Clarifying Scope of Remand Order (Mar. 28, 2013), ECF No. 99.
Consol. Court No. 11-00022 Page 16

bearings from the PRC”), which Commerce must interpret reasonably and not expansively, and 

19 U.S.C. § 1677j(b). Both sources cast doubt on the Department’s decision. 

2. The Plain Meaning of the Scope Language Contained in the Order Does Not Support the 

Department’s Decision 

The imported bearings at issue were not, in any literal or ordinary sense, “imports of 

tapered roller bearings from the PRC” as described in the scope language of the Order.

Antidumping Duty Order, 52 Fed. Reg. 22,667. It was in Thailand, not China, that the imported 

merchandise became “tapered roller bearings,” for, as discussed in Peer Bearing-Changshan, no 

part that was exported from China to Thailand plausibly could be described as an unfinished 

TRB. Id. at __, 884 F. Supp. 2d. at 1324. The uncontested facts are that the TRBs at issue 

entered the United States as finished bearings that were processed, assembled, and exported by a 

CPZ affiliate in Thailand. As Commerce stated in the Remand Redetermination, the CPZ 

affiliate in Thailand performed machining processes on the cups and cones through “a series of 

steps wherein the width, the outside diameter, and bore of the rings (cup and cone) are ground 

and the inside diameter of the outer ring and the outside diameter of the inner ring are polished.” 

Remand Redetermination 14 (footnote omitted). The ground cups and cones “are then sent 

through a further series of machining processes that demagnetize the rings and then assemble 

them into finished TRBs with the inclusion of the PRC-finished cages and rollers (which are 

themselves demagnetized and laser-etched with logos and product codes as part of the assembly 

process).” Id. at 14-15. 

3. In Enacting 19 U.S.C. § 1677j(b), Congress Implicitly Recognized Limits on the 

Department’s Authority to Place within an Order Merchandise Assembled in a Third Country 

Section 781 of the Tariff Act, 19 U.S.C. § 1677j, “Prevention of circumvention of 

antidumping and countervailing duty orders,” was added to the antidumping statute by the 

Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat. 1107, 1192. 
Consol. Court No. 11-00022 Page 17

The Conference Report for this legislation specifies that the antidumping and countervailing duty 

law prior to enactment of section 781 contained no specific provisions to address the problem of 

circumvention of antidumping and countervailing duty orders. H.R. Rep. No. 100-576, 

at 599-600 (1988) (Conf. Rep.), reprinted in 1988 U.S.C.C.A.N. 1547, 1632-33. With respect to 

subsection (b), which was similar to the current subsection (b), the Conference Report described 

pre-enactment law as follows: 

No specific provision. Under certain circumstances, Commerce considers 

merchandise completed or assembled in a third country to be subject to an 

anti-dumping or countervailing duty order or finding. 

Id. According to the Conference Report, both the House bill and a Senate amendment contained 

a provision addressing goods assembled in third countries, the two versions were similar, and the 

House acceded to the Senate amendment. Id. The Conference Report further explains that by 

means of the Senate amendment “it is made explicit that the provision applies both in cases 

where the order is on the merchandise shipped to the third country for completion or assembly 

(diversion) and where the order is on a final product, parts or components of which are sent from 

the country subject to the order to the third country for assembly or completion 

(circumvention).” H.R. Rep. No. 100-576, at 600, reprinted in 1988 U.S.C.C.A.N. at 1633.

The Conference Report did not describe the “certain circumstances” in which Commerce, 

under the law as it existed at the time, would consider merchandise completed or assembled in a 

third country to be within the scope of an order. Nevertheless, both the House bill and the Senate 

amendment included restrictions on the Department’s authority to invoke the anticircumvention 

provision directed to third country assembly or finishing operations. It is apparent from 

enactment of 19 U.S.C. § 1677j(b), as well as from the legislative history, that Congress 

considered it necessary to provide Commerce authority to apply an order to merchandise 

completed or assembled in a third country but also deemed it appropriate to place restrictions on 
Consol. Court No. 11-00022 Page 18

that authority. In the version of § 1677j(b) enacted in 1988, those restrictions were that the 

difference between the value of the merchandise on which the third country processing occurred 

and the merchandise imported into the United States be small, § 1677j(b)(1)(C), and that 

Commerce specifically determine that applying the order to the third country merchandise is 

appropriate to prevent evasion of the order, § 1677j(b)(1)(D) (1988) (amended 1994). In 

addition, before taking such action, Commerce was to take into account whether the foreign 

manufacturers are related, the pattern of trade, and whether imports of the merchandise from the 

third country increased after issuance of the order. Id. § 1677j(b)(1) (1988). 

In amending the antidumping and countervailing duty laws, the Uruguay Round 

Agreements Implementation Act of 1994 established § 1677j(b) in its current form. See Uruguay

Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809 (1994). According to the 

legislative history accompanying the Uruguay Round Agreements Act, the anticircumvention 

provisions enacted in 1988, being “based on the experience Commerce had had with 

circumvention up to that time,” were in need of revision because “Commerce subsequently 

encountered new circumvention scenarios that revealed serious shortcomings in the 1988 Act.” 

H.R. Rep. No. 103-826, pt. 1, at 102 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 3874 

(“House Report 826”). Regarding § 1677j(b), Congress specifically identified as in need of 

revision the “requirement that the difference between the value of the parts imported into the 

United States (or into a third country) from the country subject to the order and the value of the 

finished product be ‘small.’” Id. According to House Report 826, “[t]his mechanical, 

quantitative approach fails to address adequately circumvention scenarios in which only minor 

assembly is done in the United States (or in a third country), but for various reasons the 

difference in value is not ‘small.’” Id.
Consol. Court No. 11-00022 Page 19

Under § 1677j(b) as amended in 1994, the “mechanical, quantitative” approach was 

replaced by one in which Commerce could consider applying an order to merchandise completed 

or assembled in a third country where “the process of assembly or completion in the foreign 

country . . . is minor or insignificant,” § 1677j(b)(1)(C), and “the value of the merchandise 

produced in the foreign country to which the antidumping duty order applies is a significant 

portion of the total value of the merchandise exported to the United States,”§ 1677j(b)(1)(D).

The 1994 amendment inserted a new provision, now codified as § 1677j(b)(2), requiring 

Commerce to take into account five factors in determining whether the process of assembly or 

completion in the third country is “minor or insignificant”: “(A) the level of investment in the 

foreign country, (B) the level of research and development in the foreign country, (C) the nature 

of the production process in the foreign country, (D) the extent of production facilities in the 

foreign country, and (E) whether the value of the processing performed in the foreign country 

represents a small proportion of the value of the merchandise imported into the United States.” 

Id. § 1677j(b)(2). 

The legislative histories of the 1988 and 1994 versions of § 1677j(b) do not state 

explicitly that Congress intended by enacting these provisions to limit the authority of 

Commerce in construing the scope of an existing order in any situation in which third country 

completion or assembly is at issue. Nevertheless, both versions of § 1677j(b) and the 

accompanying legislative histories make clear that Congress considered it necessary to grant 

Commerce additional authority so that Commerce could address these situations by expanding, 

rather than merely interpreting, the scope of an existing antidumping or countervailing duty 

order. Congress could not have done so without possessing a general understanding that a good 

emerging from a third country completion or assembly operation such as that described in 
Consol. Court No. 11-00022 Page 20

19 U.S.C. § 1677j(b)(1)(A) and (B) ordinarily would not be considered to be within the scope of 

the order in question, at least where, as here, the commercial identity of the finished good was 

acquired in the third country.9

 Absent such an understanding, it is doubtful that Congress would 

have considered it necessary to provide Commerce the authority that it did in enacting 

§ 1677j(b), for the Department’s existing authority to interpret an antidumping duty order would

have been seen to suffice. It therefore can be inferred from the legislative purpose underlying 

§ 1677j(b) that Congress took a narrower view of the Department’s authority to interpret,

without expanding, the scope of an antidumping duty order than Commerce has taken in this 

case. 

Moreover, Congress did not consider it appropriate to allow Commerce to expand the 

scope of an antidumping duty order pursuant to § 1677j(b) without placing on that authority the 

restrictions that are set forth in § 1677j(b)(1)(C)-(E). Those restrictions would be rendered 

ineffective in this case were Commerce free to avoid them by the simple expedient of ruling that 

the order at issue already includes a TRB that not only was assembled, but also machined, in a 

third country from individual parts, none of which was an unfinished TRB. 

The court concludes that the way in which Congress provided anticircumvention 

authority in 19 U.S.C. § 1677j(b) is an indication that Commerce exceeded the limitations on its 

authority to interpret, without enlarging, the scope of the Order when it placed within that scope 

9

 In this regard, the Remand Redetermination does not dispute the contention of 

PBCD, LLC (“PBCD”) that the TRBs at issue would be considered by U.S. Customs and Border 

Protection (“CBP”) to be products of Thailand, not China, for general tariff purposes (for 

example, tariff treatment and country-of-origin marking purposes). Remand

Redetermination 45-46 (“With respect to PBCD’s complaint that our country-of-origin 

determination is not consistent with CBP rulings, we again note that, although the Department 

may consider country-of-origin determinations made by other agencies of the U.S. government, 

we are not bound by such rulings.”). 
Consol. Court No. 11-00022 Page 21

the TRBs exported from Thailand. Here, Commerce placed within the Order a product of a type 

Congress contemplated would be the subject of an anticircumvention inquiry, without actually 

conducting such an inquiry. 

4. The Record Evidence, and the Department’s Own Findings, Might Have Precluded

Commerce from Lawfully Expanding the Scope of the Order by Resort to 19 U.S.C. § 1677j(b) 

Had Commerce Invoked Its Authority under that Provision 

Had Commerce chosen to conduct an anticircumvention inquiry under 19 U.S.C. 

§ 1677j(b), it could not have placed the TRBs in question within the order without meeting all

three of the criteria Congress set forth in § 1677j(b)(1)(C)-(E). The criterion in paragraph (C) is 

that “the process of assembly or completion in the foreign country . . . is minor or insignificant.” 

19 U.S.C. § 1677j(b)(1)(C) (emphasis added). On the record of the twenty-second review, it is 

far from certain that this criterion could have been met.10

One obstacle to satisfying the paragraph (C) criterion is that the “process of assembly or 

completion” conducted in Thailand was more than mere assembly or completion. As Commerce 

itself found, the cup and cone machining process in Thailand involved “a series of steps wherein 

the width, the outside diameter, and bore of the rings (cup and cone) are ground and the inside 

diameter of the outer ring and the outside diameter of the inner ring are polished.” Remand

Redetermination 14 (footnote omitted). Commerce further found that “[t]he ground cups and 

cones are then sent through a further series of machining processes that demagnetize the rings 

and then assemble them into finished TRBs with the inclusion of the PRC-finished cages and 

rollers (which are themselves demagnetized and laser-etched with logos and product codes as 

part of the assembly process).” Id. at 14-15. The machining processes extend beyond 

10 Had Commerce attempted to reach such a finding, it would have been required in doing 

so to consider the factors of 19 U.S.C. § 1677j(b)(2) (“Determination of whether process is 

minor or insignificant”) and (3) (“Factors to consider”). As the court discussed previously in this 

Opinion and Order, Commerce conducted no inquiry under § 1677j(b). 
Consol. Court No. 11-00022 Page 22

“assembly,” and because they are critical intermediate processes conducted on the two major 

parts of a TRB, they cannot correctly be described as mere “finishing” operations. 

Other Commerce findings further indicate that satisfying the § 1677j(b)(1)(C) criterion 

might have been difficult. Although Commerce found in the Remand Redetermination that “the 

processes in the PRC, involving forging, annealing, turning, grinding green-machining, and heat 

treating, impart the essential character to the TRB,” Remand Redetermination 20, this finding is 

qualified by others of the Department’s findings that bear directly on the § 1677j(b)(1)(C) 

inquiry.11 Commerce considered the grinding and finishing processes conducted on the cups and 

cones in Thailand to be “minor” compared to the manufacturing steps conducted in China, id.

at 17, but in that same context it stated a finding as follows: “[w]e acknowledge, however, that 

this small change to the shape and surface of the cups and cones (and assembly thereof) is a 

critical step in imparting the very specific physical properties of each TRB that allow for the 

product to function as a TRB,” id. (emphasis added). Commerce further found that the cup and 

cone grinding and finishing processes conducted in Thailand “along with the assembly process 

that allows for the bearing to be sold as a functional final product, certainly plays [an] important

role in the production of a bearing.” Id. at 18 (emphasis added). There is no doubt that the 

record evidence supported the latter two findings, as the cups and cones were not functional 

components upon exportation from China, and “bearings,” finished or unfinished, did not exist 

11 This “essential character” finding is open to question in that the cups and cones left 

China in an unfinished state and that only after the further machining of the cups and cones in 

Thailand occurred, and the assembly operations occurred, did actual bearings exist that could be 

said even to have possessed an “essential character.” Moreover, the cups and cones were not 

functional as cups and cones in the unfinished state in which these two major components left 

China. But even were the court to accept the Department’s “essential character” finding as 

supported by substantial evidence, the court still could not overlook the significance for the 

19 U.S.C. § 1677j(b)(1)(C) criterion of the other findings Commerce made. 
Consol. Court No. 11-00022 Page 23

prior to the Thai assembly process. Commerce also found that the “grinding and assembly 

process” is “substantial,” saying of the grinding process that “[f]ar from applying a ‘simple’ 

surface polish or thread, the grinding process utilizes technically sophisticated machinery to 

finish various surfaces of different components to precise technical specifications.” Remand

Redetermination 26. Commerce did not consider the assembly process in Thailand to be 

“technically sophisticated,” id. at 15, but also found that this process “requires a combination of 

machinery and manpower atypical of a ‘simple’ assembly process,” id. at 26. It is difficult to 

reconcile various of the Department’s findings with a potential finding under § 1677j(b)(1)(C) 

that the “process of assembly or completion” conducted in Thailand (which plainly was more 

than that) was “minor or insignificant.” Nevertheless, the record contained other evidence that 

would lend support to such a finding; in particular, the record included the evidence from which 

Commerce calculated the aforementioned weighted-average per-unit cost of production (“COP”) 

ratios. As the court discussed previously, Commerce derived the ratios by dividing the reported 

manufacturing labor and overhead costs incurred in Thailand by the sum of those costs and the 

COP incurred in China (albeit determined according to surrogate values), which included 

materials costs as well as manufacturing labor and overhead. 

To reach an affirmative finding under § 1677j(b), Commerce also would have been 

required to find, according to paragraph (D) of § 1677j(b)(1), that the value added in China “is a 

significant portion of the total value of the merchandise exported to the United States.”

19 U.S.C. § 1677j(b)(1)(D). The record evidence from which Commerce calculated the COP 

ratios demonstrates that this criterion would be met. Remand Redetermination 20-26. The same 

cannot be said with certainty regarding the statutory criterion that follows in paragraph (E), 

which is that Commerce determine “that action is appropriate under this paragraph to prevent 
Consol. Court No. 11-00022 Page 24

evasion of such order . . . .” 19 U.S.C. § 1677j(b)(1)(E). The Remand Redetermination states 

that “[i]n the underlying proceeding, as in the prior review, Petitioner did not raise particular 

concerns with respect to circumvention potential and we similarly did not find that the 

circumstances warranted the initiation of a separate circumvention inquiry (believing our 

substantial transformation analysis sufficient to determine country of origin).” Remand

Redetermination 33. If the circumstances do not warrant an anticircumvention inquiry under 

§ 1677j(b), the criterion in § 1677j(b)(1)(E) could not be satisfied.

Some of the factors Commerce is required by 19 U.S.C. § 1677j(b)(2) to consider would 

raise further questions. Congress directed Commerce, in § 1677j(b)(2)(A), to consider “the level 

of investment in the foreign country.” Id. The Remand Redetermination found that “the level of 

investment in Thailand is not significant when compared to the level of investment in the PRC” 

but conceded that “we do not have the actual values for the level of investment,” insisting that 

“we are able to reach this conclusion based on a reasoned analysis focusing on the types of 

production equipment utilized for the grinding and assembly stages of production in Thailand in 

comparison to the types of production equipment utilized for the production stages taking place 

in the PRC.” Remand Redetermination 32. Although the record contains qualitative (but not 

quantitative) evidence supporting a finding that the investment in China was more significant 

than that in Thailand, it also contains evidence, cited in the Remand Redetermination, that the 

machining, etching, and assembly processes performed in Thailand involved different types of 

machinery and multiple stages. See id. at 15, 31-32. That the processes performed in Thailand 

extended beyond the mere “assembly or finishing” that the statute identifies in § 1677j(b)(1)(C) 

is also significant for the criterion in § 1677j(b)(2)(C), under which Commerce must consider 

“the nature of the production process in the foreign country,” § 1677j(b)(2)(C). In that regard, 
Consol. Court No. 11-00022 Page 25

Commerce found, as the court mentioned above, that the machining conducted in Thailand was a 

“critical step,” Remand Redetermination 17, and that the processes performed in Thailand 

“play[ed] [an] important role in the production of a bearing,” id. at 18. 

5. Commerce Exceeded Its Authority to Interpret the Scope Language when it Placed under the

Order the TRBs Resulting from Operations Conducted in Thailand 

For the reasons the court discussed previously, the court must conclude that the issue 

posed by the TRBs emerging from the Thai processing was of a type Congress intended would 

be addressed under § 1677j(b) in the context of a possible enlargement of the scope of the Order. 

The court is not ruling that Commerce could not have satisfied the requirements Congress 

imposed in § 1677j(b) for expansion of the Order, for the court need not resolve this issue in 

ruling on PBCD’s claim. It is sufficient to conclude, instead, that the result of any inquiry 

Commerce could have conducted under § 1677j(b) would have been far from certain. On this 

administrative record, the court cannot at the same time conclude that Commerce had the 

discretion to place these TRBs under the Order by relying solely on its interpretive authority, 

which necessarily is narrower than the anticircumvention authority provided by § 1677j(b). See

Duferco, 296 F.3d at 1098. 

The record evidence, considered as a whole, does not support a finding that the relevant 

scope language of the Order, “imports of tapered roller bearings from the PRC,” when 

interpreted so as not to expand the Order, describes the finished TRBs that were exported to the 

United States from Thailand. As the court emphasized in the foregoing discussion, the 

uncontested record facts demonstrate that no part exported to Thailand from China was an 

unfinished or incomplete TRB, and Commerce did not reach a factual finding to the contrary.

There can be no dispute over the fact that the goods at issue became tapered roller bearings in 

Thailand, not China. While it is apparent from the record evidence that the question posed by 
Consol. Court No. 11-00022 Page 26

this case was of a type Congress intended Commerce to address under paragraphs (A) and (B) of 

§ 1677j(b)(1), the same record evidence demonstrates that the processing in Thailand extended

beyond a process of “assembly or completion,” the term the statute applies in paragraph (C) of 

§ 1677j(b)(1). The processing included, prior to any assembly operations, the grinding and

honing of cups and cones that, upon exportation from China, were not functional cups and cones 

ready for assembly. Because no unfinished or incomplete bearings were exported to Thailand, 

the Thai operations cannot fairly be characterized as merely a “completion” process. As the 

court also discussed above, Commerce may have found itself unable to satisfy all the criteria of 

§ 1677j(b) yet still insisted that, according to its “totality of the circumstances” method, it could

place the TRBs within the Order by relying solely on its interpretive authority, i.e., without 

attempting to augment that authority by conducting an inquiry under § 1677j(b). Doing so 

avoided the issues that would have resulted from the restrictions Congress placed on the 

Department’s authority to expand the scope of the Order and, on the record evidence of this case, 

would render those restrictions meaningless. Commerce construed its authority to interpret, 

without expanding, the scope of the Order to be broader than it actually is.

Commerce reasoned that it “did not find that the circumstances warranted the initiation of 

a separate circumvention inquiry (believing our substantial transformation analysis sufficient to 

determine country of origin).” Remand Redetermination 33. As Commerce explained in the 

Issues and Decision Memorandum for the Final Results, the “substantial transformation analysis” 

Commerce used is an adaptation of the “established” criteria Commerce uses generally in 

making country-of-origin determinations. Issues & Decision Mem., A-570-601, at 11-12 

(Jan. 11, 2011) (Admin.R.Doc. No. 6041), available at

http://enforcement.trade.gov/frn/summary/PRC/2011-1026-1.pdf (last visited June 4, 2014) 
Consol. Court No. 11-00022 Page 27

(“Decision Mem.”). Commerce may be called on in other cases to decide, for example, whether 

a product processed in the country named in an antidumping duty order using materials and 

components from a third country should be treated as subject merchandise. Here, Commerce 

used a “one-size-fits-all” approach when the issue called for an analysis directed to the question 

posed by this case, which involved merchandise that became TRBs only after machining and 

assembly processes conducted in a third country. As the enactment of 19 U.S.C. § 1677j(b) and 

the associated legislative history indicate, such merchandise, absent expansion of an order using 

the authority of § 1677j(b), ordinarily would be considered to be products of the third country.

And as the court instructed in Peer Bearing-Changshan, “[a]ny determination Commerce 

reaches on remand must rely solely on criteria relevant to whether the parts exported to Thailand 

were substantially transformed and must be based on findings supported by substantial record 

evidence.” Id. at __, 884 F. Supp. 2d. at 1325.

In summary, the method and criteria applied in the Remand Redetermination caused 

Commerce to ignore critical record evidence, as the court has described. Considered on the 

whole, the record lacked substantial evidence to support the ultimate finding Commerce reached 

in the Remand Redetermination. The court concludes that Commerce, when placing the TRBs in 

question within the scope of the Order, exceeded its authority to interpret, without expanding, the 

scope language contained in that Order. 

D. The Court Sustains the Redetermined Surrogate Value for CPZ’s Bearing-Quality Steel Bar 

In determining the normal value of subject merchandise from a nonmarket economy 

country such as China, Commerce, under section 773(c)(1) of the Tariff Act, ordinarily values 

“the factors of production utilized in producing the merchandise.” 19 U.S.C. § 1677b(c)(1). The 

statute requires generally that Commerce value factors of production “based on the best available 

information regarding the values of such factors in a market economy country or countries” that 
Consol. Court No. 11-00022 Page 28

Commerce considers appropriate. Id. The statute provides that Commerce, in valuing factors of 

production, “shall utilize, to the extent possible, the prices or costs of factors of production in 

one or more market economy countries that are . . . at a level of economic development 

comparable to that of the nonmarket economy country, and . . . significant producers of 

comparable merchandise.” 19 U.S.C. § 1677b(c)(4). 

In the Remand Redetermination, Commerce used record price data pertaining to SKF’s 

actual market economy purchases of bearing-quality steel to value the steel input for the 

SKF-produced bearings sold by SKF’s affiliate during the POR. Remand Redetermination 65.

To value the bearing-quality steel input in the subject merchandise produced by CPZ, including 

CPZ-produced merchandise sold by an SKF-related entity after the acquisition, Commerce used 

a “surrogate” value, i.e., a value derived from data pertaining to a market economy country (in 

this instance, Thailand) that Commerce considered economically comparable to China. Id. at 39.

In the Final Results, Commerce determined the surrogate value using publicly-available 

information on the average unit value (“AUV”) of imports in India made during the POR, as 

reported by Global Trade Atlas (“GTA”). Remand Redetermination 7 & n.28. From the GTA 

import data pertaining to Indian Harmonized Tariff Schedule (“HTS”) subheading 7228.30.29,12

Commerce calculated an AUV of approximately $1.956 per kilogram.13 Analysis of the Final 

Results Margin Calculation for Peer Bearing Company-Changshan 4 n.7, Attach. 1 

12 Commerce describes this tariff subheading as applicable to “Other Bars And Rods Of 

Other Alloy Steel (Not Elsewhere Specified or Indicated); Angles, Shapes And Sections Of 

Other Alloy Steel; Hollow Drill Bars And Rods Of Alloy Or Nonalloy Steel {7228}; Other bars 

and rods, not further worked than hot-rolled, hot-drawn or extruded; Bright bars {.30}; Other 

{.29}.” Remand Redetermination 7 n.28.

13 The actual surrogate value varied slightly from this amount because Commerce 

combined the public import data with proprietary data pertaining to certain market economy 

purchases of steel bar by CPZ. Analysis of the Final Results Margin Calculation for Peer 

Bearing Company-Changshan 4, Attach. 1 (Jan. 11, 2011) (Admin.R.Doc. No. 6039). 
Consol. Court No. 11-00022 Page 29

(Jan. 11, 2011) (Admin.R.Doc. No. 6039) (“PBCD Final Results Analysis Mem.”). Because the 

Indian subheading is not specific to bearing-quality steel goods, Commerce used only the GTA 

import data thereunder that pertained to Indian imports from the United States, Japan, and 

Singapore, determining from record evidence that the other countries of origin shown in the 

Indian GTA data “could not be shown definitively to have exported bearing quality steel to India 

during the POR.” Decision Mem. 34 (footnote omitted); see also PBCD Final Results Analysis 

Mem. 4. That record evidence consisted of Indian import data compiled by Infodrive India 

(“Infodrive”), which CPZ had placed on the administrative record during the review.14 Decision

Mem. at 33-34. 

In its previous opinion, the court held that record evidence did not support a finding that 

the subset of Indian import data of HTS subheading 7228.30.29, a “basket” category not specific 

to bearing-quality steel, represented the best available information to value the steel bar inputs. 

Peer Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d at 1332. The court noted that these 

data, even when limited to data pertaining to countries shown by Infodrive India to have 

exported bearing-quality steel to India, still included “substantial quantities of 

non-bearing-quality steel goods within the dataset.” Id. The court directed Commerce to 

reconsider its surrogate value, consider available alternatives, including the use of the Infodrive 

data, and reach a surrogate value shown by substantial evidence to be based on the best available 

information. Id. at __, 884 F. Supp. 2d at 1333, 1339. In the Remand Redetermination, 

Commerce decided that certain GTA import data pertaining to Thailand, specifically, data for 

Thai HTS subheading 7228.30.90, were the best information on the record with which to value 

14 Infodrive India (“Infodrive”) is a private entity that compiles data from commercial 

documentation. See Remand Redetermination 37. 
Consol. Court No. 11-00022 Page 30

the steel bar input. See Remand Redetermination 39. These data showed an AUV of $1.43 per 

kilogram. Id. at 38. Commerce also considered the record Infodrive data that is specific to 

bearing-quality steel imports in India, which showed an AUV of $1.60 per kilogram. Id.

at 37-38. Commerce decided against using the Infodrive data as a surrogate value but found 

these data suitable for use as a benchmark to show that the Indian import data may be 

aberrational when used to value bearing-quality steel. Id. at 37. 

PBCD commented in favor of the revised surrogate value. PBCD’s Comments 3. SKF 

objected on the ground that Commerce, when determining the normal value of all merchandise 

SKF sold during the POR, including the subject merchandise produced by CPZ, should have 

valued the steel bar input according to the price data in SKF’s market economy purchases of 

bearing-quality steel bar. SKF’s Comments 12-16. SKF argues that using the market prices 

exclusively would be consistent with the Department’s policy and practice, that SKF 

“demonstrated that it could obtain a substantial portion of its steel bar inputs at a given market 

economy price during the POR,” and that, “[t]herefore, the Department should apply this market 

economy price to all the products SKF sold during the POR, even those products for which the 

market economy price may not be representative, such as the products acquired from PBCD’s 

inventory.” Id. at 14. 

SKF adds that, as a matter of fairness, it should not be penalized because of the past 

purchasing of another party (i.e., CPZ), which is a matter over which it had no control. Id.

Referring to the Department’s policy of using market economy purchase data when market 

economy purchases are 33% or more of a respondent’s total purchases of an input, SKF argues 

that “[i]n the present case, SKF could not control how much market economy steel [CPZ] 

purchased before the acquisition” and that “[a]ll SKF could do was ensure that it purchased more 
Consol. Court No. 11-00022 Page 31

than 33 percent of its steel from market economy sources after the acquisition.” Id. According 

to SKF, “[i]t would be fundamentally unfair to penalize SKF for [CPZ]’s failure to purchase 

more steel from market economy sources, particularly when [CPZ] produced merchandise for 

only three months of the period of review.” Id. SKF adds that “the Department has not 

explained why it is reasonable to apply a respondent’s current market economy price to products 

from a respondent’s inventory that it produced in the past but not to apply a respondent’s current 

market economy price to products sold by the respondent that were acquired from the inventory 

of another company that has ceased to exist.” Id. at 16. 

A regulation of the Department provides that “[t]he Secretary normally will use publicly 

available information to value factors [of production].” 19 C.F.R. § 351.408(c)(1). In a second 

sentence, the regulation includes an exception to the general preference for the use of publicly 

available information in valuing factors of production of nonmarket economy (“NME”) 

producers, providing that “[h]owever, where a factor is purchased from a market economy 

supplier and paid for in a market economy currency, the Secretary normally will use the price 

paid to the market economy supplier.” Id. The Department’s use of SKF’s market economy 

purchase prices in valuing all steel bar input SKF used in producing subject merchandise sold 

during the POR, as described in the Remand Redetermination, appears to have conformed to the 

practice identified in the second sentence. The regulation contains a third, concluding sentence 

that reads as follows: “In those instances where a portion of the factor is purchased from a 

market economy supplier and the remainder from a nonmarket economy supplier, the Secretary 

normally will value the factor using the price paid to the market economy supplier.” Id.

A threshold question presented is whether the third sentence applies to the issue 

presented here such that Commerce, if following its “normal” practice, should have valued 
Consol. Court No. 11-00022 Page 32

CPZ’s use of the steel bar input according to SKF’s market economy purchases where SKF made 

the sale. On its face, the regulation can be read to apply to a situation in which a respondent 

NME producer has U.S. sales of merchandise within a period of review that were manufactured 

by another NME producer. A contrary reading would hold that the term “factor,” i.e., “factor of 

production,” should be read to be unique to a single producer and that, therefore, the third 

sentence in the regulation does not address the issue posed by this case. Commerce gave 

indications of intending the latter when it promulgated § 351.408(c)(1). In the preamble 

accompanying promulgation of the regulation (“Preamble”), Commerce explained that it did not 

intend to apply the “normal” method described in the third sentence of the regulation unless the 

amounts purchased from a market economy supplier were “meaningful.” See Antidumping 

Duties; Countervailing Duties, 62 Fed. Reg. 27,296, 27,366 (May 19, 1997) (“Preamble”). The 

Preamble also suggested, without clearly stating, that Commerce intended to apply the method 

described in the third sentence only if the NME producer itself made the significant-quantity 

market economy purchases. Id. (“Moreover, as noted in the AD Proposed Regulations, 61 FR 

at 7345, we would not rely on the price paid by an NME producer to a market economy supplier 

if the quantity of the input purchased was insignificant.”) (emphasis added). Referring to a 

comment it had received on the proposed version of the regulation, the Preamble adds that 

“[b]ecause the amounts purchased from the market economy supplier must be meaningful, this 

requirement goes some way in addressing the commenter’s concern that the NME producer may 

not be able to fulfill all its needs at that price.” Id. (emphasis added). 

In a Federal Register notice issued in 2006 (the “Methodologies Notice”), Commerce 

established “clearer guidance as to the circumstances in which it will accept market economy 

purchase prices to value an entire input” and in so doing explained how it normally would decide 
Consol. Court No. 11-00022 Page 33

whether amounts purchased from a market economy supplier are “meaningful.” Antidumping

Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty 

Drawback; and Request for Comments, 71 Fed. Reg. 61,716, 61,717 (Oct. 19, 2006) 

(“Methodologies Notice”). Commerce stated in the Methodologies Notice that “[t]he 

Department is now instituting a rebuttable presumption that market economy input prices are the 

best available information for valuing an entire input when the total volume of the input 

purchased from all market economy sources during the period of investigation or review exceeds 

33 percent of the total volume of the input purchased from all sources during the period.” Id.,

71 Fed. Reg. at 61,717-18. This formulation of the rebuttable presumption can be read to mean 

that Commerce will apply its 33% test to the total amount of an input purchased during a POR 

even in a situation in which two producers were involved. Nevertheless, the Methodologies 

Notice, like the Preamble, suggests that the discussion refers to a context involving a single 

producer that purchases a factor of production. See id., 71 Fed. Reg. at 61,718 (“In determining 

whether market economy purchases meet this 33 percent threshold, the Department will compare 

the volume that the producer purchased from market economy sources during the period of 

investigation or review with the respondent’s total purchases during the period.”). In view of the 

guidance provided by the Preamble (which is consistent with some of the guidance provided in 

the Methodologies Notice), the court concludes that Commerce interprets the third sentence of 

§ 351.408(c)(1) to apply in the context of a single producer. The court defers to this

interpretation. 

The court does not hold or imply that Commerce would have lacked authority under 

§ 351.408(c)(1), which describes the Department’s “normal” method, to use SKF’s market

economy purchase data as a surrogate for the valuation of CPZ’s steel bar input in the SKF sales 
Consol. Court No. 11-00022 Page 34

on the record facts of this case, had Commerce chosen to do so.15 Rather, the court concludes 

that such a course of action would have been a departure from the Department’s “normal” 

method as set forth in the regulation as interpreted by Commerce itself. 

The Remand Redetermination justifies the Department’s decision to value the steel bar 

input in the merchandise sold by SKF, but produced by CPZ, according to the Thai import 

surrogate value rather than SKF’s market economy purchase data, on the ground that it is 

consistent with the Department’s practice to do so. Remand Redetermination 63-64. SKF 

impliedly disagrees, but the Department’s own construction of § 351.408(c)(1), discussed above, 

convinces the court that Commerce followed its normal practice in this case, both in using SKF’s 

market economy purchases to value the steel bar input in all subject merchandise produced by 

SKF and in using the surrogate value for the steel bar input in the CPZ-produced merchandise 

that SKF sold. SKF does not make a convincing argument that the Department should make an 

exception to its normal practice. SKF’s argument that the Remand Redetermination did not 

provide a reasonable explanation for the Department’s decision is a more convincing argument, 

for the Remand Redetermination does not offer a rationale beyond that of achieving consistency 

with the Department’s practice. The reasoning underlying the decision would have been 

clarified and augmented had Commerce also indicated why it might consider the 

15 Nor would the statute bar such an approach. Commerce is directed to value factors of 

production according to the “best available information regarding the values of such factors in a 

market economy country or countries considered to be appropriate by the administering 

authority.” 19 U.S.C. § 1677b(c)(1). The statute provides that Commerce, in valuing factors of 

production, “shall utilize, to the extent possible, the prices or costs of factors of production in 

one or more market economy countries that are . . . at a level of economic development 

comparable to that of the nonmarket economy country, and . . . significant producers of 

comparable merchandise,” id. § 1677b(c)(4), but Commerce, in selecting the best available 

information with which to determine a surrogate value, is not necessarily precluded from using 

market economy purchase data even if those data do not pertain to a country satisfying the 

criteria of § 1677b(c)(4). 
Consol. Court No. 11-00022 Page 35

Thai-import-based surrogate value to be the best available record information, and to result in a 

more accurate margin, when viewed in comparison to the price data pertaining to SKF’s market 

economy purchases. 

Nevertheless, the court declines to remand the matter for additional explanation. The 

rationale in the Remand Redetermination that Commerce followed its practice is properly viewed 

in the context of the reasoning supporting the practice that is set forth in the Preamble. In 

limiting its normal use of market economy purchase data in the way that it did in adopting the 

practice, Commerce balanced competing considerations. Commerce expressly recognized that 

market economy purchase data would not be publicly available information, for which a 

preference is expressed in the first sentence of § 351.408(c)(1). Preamble, 62 Fed. Reg. 

at 27,366. Commerce recognized a general interest in the accuracy furthered by the use of 

market economy purchase data, but in doing so Commerce also placed significance on the 

question of whether an NME producer would be able to fulfill all its needs at the market 

economy price. Id. Nothing in the subsequent Methodologies Notice is inconsistent with the 

balancing of these competing considerations that Commerce undertook in the Preamble. Owing 

a degree of deference to the methodological choice Commerce made in adopting its practice, and 

considering the rationale for that choice as explained in both the Preamble and the 

Methodologies Notice, the court must affirm the Department’s decision to use the Thai import 

surrogate data rather than SKF’s market economy purchases when valuing the steel bar input in 

merchandise sold by SKF but produced by CPZ. 

E. The Court Orders a Second Remand on the Department’s Choice of Factor-of-Production 

Data Used to Determine the Normal Value of the Pre-Acquisition Inventory Sold by SKF 

In contesting the Final Results, Timken claimed that Commerce erred in using SKF’s 

factor-of-production data in determining the normal value of the pre-acquisition inventory sold 
Consol. Court No. 11-00022 Page 36

by SKF and thereby “contravened the statutory requirements of l677b(c)(1)” because these data 

did not correspond to the actual producer of the merchandise in question.16 Timken Co.’s Mem. 

of P. & A. in Supp. of its Mot. for J. on the Agency R. 23 (Aug. 19, 2011), ECF No. 36. In Peer

Bearing-Changshan, the court ordered Commerce to “reconsider its decision to value 

pre-acquisition-produced subject merchandise using factors of production pertaining to the 

post-acquisition producer” and redetermine normal value in accordance with § 1677b(c)(1). Id.

at __, 884 F. Supp. 2d at 1339-40. 

The administrative record of the twenty-second administrative review contained three 

sets of FOP data concerning the pre-acquisition inventory of TRBs. SKF submitted FOP data 

based on its production of subject merchandise following the acquisition, i.e., data relating to 

SKF’s production of subject merchandise from September 12, 2008 through May 31, 2009.17

SKF Section C & D Response, Exs. D-l to D-4, D-42 (Nov. 12, 2009) (Admin.R.Doc. No. 5663); 

Joint SKF & PBCD Section C & D Supplemental Resp. 11-12, Ex. SD-4 (May 28, 2010) 

16 In reply, defendant argued that the claim brought by the Timken Company (“Timken”) 

was barred by the exhaustion doctrine. Peer Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d 

at 1338. The court subsequently held that, although Timken failed to raise the issue before 

Commerce and thus failed to exhaust its administrative remedies, the “pure legal question” 

exception to exhaustion applied. Id. The court noted that the instant factors of production issue 

“presents no question of fact” because Commerce had determined “that SKF was not the 

successor in interest to CPZ,” and subsequently “treated the companies as separate respondents 

in the review.” Id. (citing Final Results, 76 Fed. Reg. at 3,087). The court, therefore, concluded 

that “[t]he only question to be resolved is whether, on these uncontested facts, Commerce acted 

inconsistently with 19 U.S.C. § 1677b(c)(1) in using the FOP data it obtained from SKF to value 

subject merchandise produced by CPZ.” Id.

17 SKF refers to its initial factor-of-production data submission as the “FOPPER2” 

database. Letter from Herbert C. Shelley to the Sec’y (SKF Section C & D Resp.) 2

(Nov. 12, 2009) (Admin.R.Doc. No. 5663). SKF refers to its supplemental factor-of-production 

data submission as the “FOPPER2SUP” database. Joint SKF & PBCD Section C & D 

Supplemental Resp. 11-12 (May 28, 2010) (Admin.R.Doc. No. 5761) (“Joint Sec. C & D 

Supplemental Resp.”). 
Consol. Court No. 11-00022 Page 37

(Admin.R.Doc. No. 5761). PBCD submitted FOP data concerning the TRBs produced by CPZ 

during the first three months of the POR, i.e., June 1, 2008 through August 31, 2008.18 PBCD

Section D Resp. 1, 5, Ex. 1 (Nov. 13, 2009) (Admin.R.Doc. No. 5672). Finally, petitioner 

Timken submitted data on CPZ’s factors of production that pertained to the prior (twenty-first) 

administrative review period, i.e., June 1, 2007 through May 31, 2008. Factual Submission of 

the Timken Co. 1, Ex. 3 (Nov. 17, 2009) (Admin.Rec.Doc. No. 5677). 

In the Remand Redetermination, Commerce recalculated the normal value (“NV”) of 

SKF’s sales of pre-acquisition inventory using factor-of-production data submitted by PBCD for 

merchandise that CPZ produced during the first three months of the POR. Remand

Redetermination 39. In explaining its decision to deviate from the course it chose in the Final 

Results, Commerce stated that while it “prefers to calculate NV based on the FOP data 

corresponding to production of subject merchandise during the POR, and not the FOP data 

corresponding to the production of the merchandise actually sold during the POR,” id., it also 

prefers to “calculate NV using the FOPs of the actual producer(s) of the merchandise,” id. at 40.

Based on this rationale, Commerce concluded that the FOP data submitted by PBCD yielded the 

“accurate normal value to use in the dumping calculation” because the data related to the 

producer of the merchandise at issue. Id. at 62. Timken does not oppose the Department’s 

resolution of this issue; SKF, however, raises several objections. 

The statute directs Commerce to “determine the normal value of the subject merchandise 

on the basis of the value of the factors of production utilized in producing the 

18 PBCD refers to its submitted factor-of-production data as the “PBCDFPOl” database.

PBCD Section D Resp. 1, 5, Ex. 1 (Nov. 13, 2009) (Admin.R.Doc. No. 5672). In a subsequent 

supplemental submission, PBCD explained that, due to its recordkeeping system, it was unable 

to determine factors for the period of September 1, 2008 through September 11, 2008. Joint Sec. 

C & D Supplemental Resp. 11-12. 
Consol. Court No. 11-00022 Page 38

merchandise . . . .”19 19 U.S.C. § 1677b(c)(l) (emphasis added). According to the plain meaning 

of this directive, the FOPs used by the Department should, as Commerce concluded upon 

remand, pertain to the actual party that produced the merchandise, but they also should 

correspond to the time period in which the merchandise was produced (which is not necessarily 

when the merchandise was sold). The statute contemplates that FOP data meeting these two 

conditions ordinarily would be used to calculate normal value. If no such data are on the record, 

or if there is a valid reason why the data on the record may not properly be used, Commerce 

would have resort to the “facts otherwise available” pursuant to authority conferred by 19 U.S.C. 

§ 1677e(a).

In the Remand Redetermination, Commerce provided adequate reasoning for rejecting 

SKF’s post-acquisition FOP data, which correspond with neither the correct producer nor the 

time period during which the merchandise was produced. Commerce did not address the 

question of why it chose not to use the FOP data submitted by Timken. On remand, Commerce 

must reconsider its selection of the data submitted by PBCD over the data submitted by Timken 

and provide a rationale grounded in the requirements of the statute for the data set it chooses. 

19 Section 1677b(c)(1) states, in pertinent part, as follows: 

If—

(A) the subject merchandise is exported from a nonmarket economy country, and 

(B) the administering authority finds that available information does not permit the 

normal value of the subject merchandise to be determined under subsection (a) of this 

section,

the administering authority shall determine the normal value of the subject merchandise on

the basis of the value of the factors of production utilized in producing the merchandise . . . . 

19 U.S.C. § 1677b(c)(1) (emphasis added). 
Consol. Court No. 11-00022 Page 39

SKF opposes the Department’s FOP redetermination on several grounds.20 First, SKF 

argues that its own FOP data yield a more accurate normal value calculation. SKF’s 

Comments 6-8. SKF raises several points in support of this argument, which it summarizes as 

follows: 

Given that (1) such a large portion of the [CPZ-produced] products sold by SKF 

were not produced during the three month period corresponding to [CPZ’s] 

FOPS; (2) SKF’s average factor usage is likely to be very similar to [CPZ’s] 

average factor usage; and (3) [CPZ’s] FOPs are based on such a short period of 

time, one cannot reasonably conclude[] that [CPZ’s] FOPs provide a more 

accurate basis for calculating normal value of the [CPZ]-produced products sold 

by SKF.

Id. at 8. Second, SKF argues that, “[e]ven if there were evidence to suggest that [CPZ’s] FOPs 

more accurately represent the production of the [CPZ]-produced merchandise sold by 

SKF, . . . the Department’s use of these FOPs would still be arbitrary and capricious,” because 

Commerce deviated from its policy of using “the FOPs that correspond to a respondent’s 

production during the POR” without providing “a reasonable justification for doing so.” Id. at 9 

(citing Motor Vehicle Mfrs. Ass’n. of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,

463 U.S. 29, 57 (1983)). Finally, SKF adds that, as a matter of fairness, Commerce should not 

use CPZ’s factor-of-production data to value SKF’s post-acquisition sales of CPZ-produced 

20 As a preliminary argument, SKF reasserts that Timken failed to exhaust its 

administrative remedies on this issue and argues, further, that no “pure question of law” 

exception applies. Pls.’ Comments on Final Results of Redetermination Pursuant to Remand 3-6 

(June 12, 2013), ECF No. 103 (“SKF’s Comments”). The court addressed this issue in Peer

Bearing-Changshan, 36 CIT at __, 884 F. Supp. 2d at 1338. Because the issue before the court 

in Peer Bearing-Changshan was one of statutory construction, the court believes it was correct 

in ruling that Timken’s failure to exhaust administrative remedies was excusable under the “pure 

legal question” exception. On remand, Commerce reached a new determination in response to 

the court’s order but did not do so under protest. The Remand Redetermination raises a new 

question that the court now must consider (which, incidentally, also involves the plain meaning 

of the statute, 19 U.S.C. § 1677b(c)(1)). 
Consol. Court No. 11-00022 Page 40

merchandise as CPZ “had ceased to exist and SKF had no control over the production process 

and the associated costs.” Id. at 10.

The court does not find SKF’s arguments persuasive. As discussed, supra, the statute 

instructs Commerce to “determine the normal value of the subject merchandise on the basis of 

the value of the factors of production utilized in producing the merchandise” when the subject 

merchandise is exported from an NME country. 19 U.S.C. § 1677b(c)(l) (emphasis added). 

SKF’s factors of production could not possibly have been those actually utilized in producing the 

pre-acquisition merchandise, which was produced by CPZ. In the Remand Redetermination, 

Commerce correctly disregarded SKF’s factor-of-production data in determining the normal 

value of pre-acquisition merchandise. The argument that CPZ had ceased to exist and that SKF 

therefore had no control over the production process and the associated costs is also 

unpersuasive. The two aspects of FOP data stemming from the directive contained in 

§ 1677b(c)(l), i.e., the identity of the producer and time of production, must take precedence over

the concern raised by SKF. 

III. CONCLUSION AND ORDER

For the reasons discussed in the foregoing, the court affirms in part, and rejects in part, 

the Final Results of Redetermination Pursuant to Court Remand (May 13, 2013), ECF No. 100 

(public version), ECF No. 101 (confidential version) (“Remand Redetermination”). 

Accordingly, upon consideration of the Remand Redetermination, the comments of the parties 

thereon, and all papers and proceedings herein, and upon due deliberation, it is hereby

ORDERED that the Remand Redetermination submitted by the International Trade 

Administration, U.S. Department of Commerce (“Commerce” or the “Department”) on 

May 13, 2013, be, and hereby is, sustained in part and remanded to Commerce in part in 

accordance with this Opinion and Order; it is further 
Consol. Court No. 11-00022 Page 41

ORDERED that the Remand Redetermination be, and hereby is, sustained with respect 

to the Department’s redetermination of the surrogate value for the consumption of 

bearing-quality steel bar by Peer Bearing Company-Changshan (“CPZ”); it is further 

ORDERED that Commerce shall submit to the court a second Remand Redetermination 

in which it redetermines, in accordance with the requirements of this Opinion and Order, the 

country of origin of certain tapered roller bearings that underwent further processing in Thailand 

consisting of grinding and honing (finishing) of cups and cones, and assembly; it is further 

ORDERED that Commerce, in its second Remand Redetermination, shall reconsider its 

use of the factor-of-production data submitted by PBCD, LLC (“PBCD”) in calculating the 

normal value for merchandise that was imported prior to the acquisition and sold by 

post-acquisition Changshan Peer Bearing Company (“SKF”), shall also consider the possible use 

of the factor-of-production data submitted by The Timken Company (“Timken”) for this 

purpose, and shall explain the reasons for its choice; it is further 

ORDERED that Commerce shall submit its second Remand Redetermination within 

sixty (60) days of the issuance of this Opinion and Order; it is further 

ORDERED that PBCD, SKF, and Timken shall have thirty (30) days from the 

Department’s filing of the second Remand Redetermination to file any comments thereon; and it 

is further 

ORDERED that defendant shall have fifteen (15) days from the last filing of comments 

on the second Remand Redetermination in which to file any response to such comments. 

___________________________________

Timothy C. Stanceu 

Judge

Dated:

New York, New York 

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